Tale of Two Nations: Medicine Across the Border

How did Canada and the U.S. wind up with such different approaches to healthcare

This is the first in a week-long series comparing the Canadian and U.S. healthcare systems, critically examining the stereotypes through which they are often viewed.

Consider two countries. They are neighbors, with a common majority language, similar cultures, a long history of alliance and friendship. For most of their history, healthcare in the two had been indistinguishable -- similar training and skills for doctors, similar hospitals, and similar patient expectations.

The two countries are, of course, Canada and the United States.

In the years after World War II, doctors in Canada and the U.S. practiced medicine in ways that were all but identical. They used the same textbooks and had similar medical schools. Their hospitals were usually community-based non-profit institutions. And patients either paid out of pocket on a fee-for-service basis or had some sort of health insurance, itself usually non-profit.

Healthcare in the two countries was so similar that up until the mid-1960s "the (U.S.) Joint Commission on Hospital Quality could operate up and down the border, could go to Canada," says Yale University's Ted Marmor, PhD, an expert on comparative studies of medical systems.

Moreover, he says, "the structure of argument about how medical care should be financed and distributed was quite similar."

But looking across borders today, the picture is starkly different: Canada has a single-payer insurance system for hospital care and physician services that is intended to cover everybody, while the U.S. has a patchwork of public and private insurance schemes with important gaps in coverage.

To some, Canada's healthcare system is a mess of dreary, unresponsive, and crowded hospitals staffed by regimented, unhappy doctors, while to others Canada's system is a shining city on the hill, with high-quality medical care for all.

To some, U.S. healthcare is a soulless industry that excludes the poorest from care and charges the earth to those who can meet the bills, while to others the U.S. system is the home of some of the best and most innovative medical care on the planet.

All those views, of course, contain some grains of truth, but in the current caustic atmosphere surrounding U.S. healthcare, it's not enough to point to the north and invoke a stereotype. Instead, we need to ask questions about both countries and see how the answers stack up.

The first question might be: How did we get here? How did two similar countries, starting from much the same place, arrive at such different solutions? Then the obvious next question is: How are those solutions working, for patients, for doctors, for payers, and for society as a whole?

The second question is the tough one -- and MedPage Today will spend the next few days considering some aspects of it -- but the answer to the first is a relatively straightforward matter of history.

In the years after the second world war, Marmor says, both countries saw "an increase in the sentiment about treating medical care as a merit good and distributing it more fairly than had been done in the past."

Initially, steps toward that goal in both countries were blocked by what Marmor calls conservative coalitions -- the national medical associations and political structures. President Harry Truman, who had proposed a system of national health insurance in the late 1940s, saw the idea labeled "un-American" by the AMA, which called his administration "followers of the Moscow party line."

Reaction was similar in Canada, with the added difficulty that healthcare, under the country's constitution, is a provincial responsibility; the national government had no formal jurisdiction (although in the 1960s Canada's Parliament found a way around that.)

"Medical care financing is one of those issues that divides societies; it doesn't unite them," Marmor said. Across the developed world, he added, proposals for healthcare reform have never had bipartisan support.

Nonetheless, the idea didn't go away.

In the late 1950s, Democratic politicians in the U.S. proposed a more targeted program that would ensure that people over 65 had medical care, the program that would eventually emerge in 1965 as Medicare/Medicaid.

What was dubbed a "three-layer cake" included hospital insurance paid for by Social Security taxes, a voluntary program covering physicians' costs paid for by a contribution from beneficiaries and general revenue from Washington, and an expansion of the earlier Kerr-Mills Act.

Outside the public sphere, however, U.S. medicine was also undergoing a huge change. A collection of small businesses whose owners knew they would never get rich but would be well-regarded in the community became an industry with all its entrepreneurial baggage.

"When I was in medical school, there wasn't any talk about money," said Jamie Koufman, MD, director of the Voice Institute of New York. "The idea of medicine being driven by money came along in the '60s and '70s."

It has gotten to the point, she said, that "now we have coders making rounds with doctors and interns to make sure no service goes unbilled."

"Healthcare industry is an oxymoron."

North of the border, healthcare remains much less industrialized, although we shall see that there is a constant current push in that direction.

As the U.S. was developing its systems, legislators in the western province of Saskatchewan had introduced a taxpayer-financed system of hospital insurance and later extended it -- over vociferous opposition from the medical establishment -- to cover physician services.

That program became the model for what Canadians, confusingly, also call Medicare -- a collection of 13 provincial and territorial single-payer insurance systems, which comprehensively cover hospital and physician services (but not dental care or outpatient drug costs or some other types of care).

The Canadian government got into the act -- despite its constitutional restrictions -- by offering to pay half the cost of such programs in any province or territory that set one up. Not surprisingly, there were no hold-outs, and by 1961 the bones of the current system were in place.

Public support for the project was "huge from day one," said Gordon Guyatt, MD, of McMaster University in Hamilton, Ont., while for the provincial and territorial governments the federal offer was such a "juicy carrot they couldn't resist."

And doctors' incomes -- based on fee schedules negotiated between medical associations and the provinces and territories -- went up, so there was little opposition from the profession. "The doctors were essentially bought off," Guyatt said.

There are some variations, but overall Canadian Medicare has several characteristics:

It's universal -- All citizens and legal residents are covered for hospital care or physician treatment

It's free -- in the sense that there is no direct cost to patients at the point of care (but the money comes from tax revenue)

It's portable -- Patients from Ontario, for instance, can get still get care if they fall ill elsewhere in the country

It's administratively simple -- Doctors deal with a single payer on an established fee schedule

In general, prescription drugs are not covered outside of the hospital setting and neither is dental care, so many Canadians turn to private or employer-provided insurance to cover those gaps or pay themselves. Most provinces and territories do provide drug coverage for some groups, with variations across the country. Ontario, for instance, has a drug assistance plan for residents 65 and older.

So by the end of the 1960s, both countries had national healthcare programs in place, with one important difference, Marmor said: "Canada went for universal benefits first, we went to population groups first."

What has happened since? How are these different solutions working? Like the proverbial elephant and the blind men, the answer can depend on what part you examine. MedPage Today begins to describe the elephant tomorrow.

Michael Smith is a Canadian citizen based in Toronto, where he is covered under Ontario's provincial health plan.

Accessibility Statement

At MedPage Today, we are committed to ensuring that individuals with disabilities can access all of the content offered by MedPage Today through our website and other properties. If you are having trouble accessing www.medpagetoday.com, MedPageToday's mobile apps, please email legal@ziffdavis.com for assistance. Please put "ADA Inquiry" in the subject line of your email.